Divergent ESG-ratings and their impact on corporate financial performance evidence from Europe

• Autor(a) principal: Jacobsen, Ida Molberg
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/40739
• topic: Domínio/Área Científica::Ciências Sociais::Economia e Gestão

In recent years, stakeholders' interests in companies' socially and responsible behavior have increased significantly. The evolving focus on sustainability within the business has led to several companies implementing ESG aspects as part of their business strategy, resulting in the emergence of ESG-rating agencies. However, evaluating a company's ESG performance is not a standardized approach as each ESG-rating provider has its distinct methodology and framework. Building on the divergence between these rating agencies, this paper aims to investigate if selecting one ESG-rater versus another can impact the results and conclusions obtained in empirical analysis. To do so, this thesis examines whether and how environmental, social, and governance ratings from different ESG-rating agencies influence companies' financial performance, using a sample of STOXX Europe 600 listed companies. Based on correlation and regression analysis, this research finds support for a positive and statistically significant relationship between ESG-score and financial performance for European listed firms. This conclusion holds regardless of Refinitiv Eikon, Bloomberg, or S&P Global being the rating provider. However, the results reveal that the strength of the relationship between ESG performance and financial performance differs slightly between the providers. Moreover, the difference in the strength of influence is minimal, signifying that the results and conclusions drawn in the analysis are not significantly dependent on the chosen ESG-rating provider.